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Bankruptcy dilemma! A new force announced the suspension of production

2024-04-17 Update From: AutoBeta NAV: AutoBeta > News >

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AutoBeta(AutoBeta.net)03/20 Report--

At a time when the new power of car-building in China is in full swing, the new power of car-building in the United States is struggling. On March 18th Fisker, an American electric car maker, said it would suspend production of electric vehicles for six weeks. Fisker reiterated that it was in talks with a large carmaker about a potential deal, but did not give a name.

Earlier this month, Henrik Fisker, chief executive of Fisker, confirmed that he was in talks with a "large carmaker" about financing, but did not directly name the carmaker, which industry insiders believe is most likely to be negotiated by Fisker given the market position of both sides in the electric vehicle sector.

If Fisker succeeds in reaching a financing agreement with Nissan, it will provide the former with the necessary financial support and may accelerate cooperation in electric vehicle technology and market expansion. For Nissan, the cooperation with Fisker can further consolidate its position in the global electric vehicle market and promote technological innovation and development. However, whether the partner is Nissan has yet to be confirmed, and the two sides have not yet signed any agreement on financing, but the market will continue to monitor the development of the incident, as it is a matter of life and death for Fisker.

On February 29th, Fisker reported revenue of $273 million for the reporting period, compared with $342000 for the same period; an operating loss of $417 million, compared with a loss of $530 million; a net loss of $762 million, compared with a loss of $547 million over the same period; and $325 million in cash and cash equivalents and $70.45 million in restricted cash held by Fisker as of December 31, 2023.

In 2023, Fisker accumulated production of more than 10,000 vehicles, but the actual delivery volume is only about 4700. Fisker plans to deliver 20, 000 to 22000 Ocean electric vehicles in 2024, down from 35600 expected. The company said current resources were "insufficient" to support its operations over the next 12 months. Without additional financing, Fisker said it might be forced to reduce Ocean production, investment, operations and further layoffs.

Now, Fisker has come to the moment of life and death. Fisker has hired law firms FTI Consulting and Davis Polk to help it file for bankruptcy, the Financial Associated Press reported on March 14, citing the Wall Street Journal. People familiar with the matter complained that Fisker, which may be close to cash this year, issued a continuing business warning last month, saying there were "significant questions" about its sustainability. Affected by the news, Fisker shares plunged 51.94% that day, reaching an all-time low of $0.14, with a total market capitalization of only $86.897 million.

In fact, it is not only Fisker that is in trouble, but also the once-hot Rivian and Lucid. In recent days, both companies have reported disappointing results.

On Feb. 21, Rivian reported annual revenue of $4.434 billion in 2023, up 167% from a year earlier, but a loss of $5.432 billion. In its earnings report, Rivian announced that it would cut its workforce by 10% in response to the severe situation in the electric vehicle market. It is understood that Rivian delivered a total of 50100 new cars in 2023, much lower than market expectations. Tesla CEO Musk said that on the current trajectory, Rivian would go bankrupt in about six quarters, adding that "maybe the trajectory will change, but not yet". It is understood that as of December 31, 2023, Rivian had cash reserves of $7.9 billion on its books.

Lucid's situation is not optimistic either. Lucid reported a net loss of $2.83 billion for the whole of 2023, an increase of 117% compared with the same period last year. Lucid expects to produce 9000 cars this year, well below analysts' expectations of 14000. Last year, the company produced 8428 vehicles, and Lucid lost about $336000 for every car it produced last year, based on a net loss of $2.83 billion.

A few years ago, Rivian, Lucid and Fisker, the new powers of American carmaking, were all very popular. In the face of high investor interest, the market capitalization of these American electric carmakers once had the potential to challenge Tesla. Today, however, the situation is not so optimistic. After the beginning of the New year in 2024, the new power of car-building "life-and-death reshuffle" is staged around the world. According to a survey conducted by American Automotive News on the financial situation of 10 new car-building companies in the United States, most of them are facing the dilemma of being stretched by cash flow, and only four enterprises have enough cash on hand to maintain their operations for more than a year.

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